MEDIA GLOBAL ASSETS LTD v. CATCHY ENTERTAINMENT LTD

HCA61/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.61 OF 2004

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D E C I S I O N

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1. This is the adjourned hearing of the plaintiff's summons issued on 3 February 2004. The summons was issued under section 21L of the High Court Ordinance and Order 20, rule 5, Order 29, rules 1 and 2 and/or the inherent jurisdiction of the High Court. The principal relief sought in the summons is the delivery up of the master recordings set out in the First Schedule to the summons, to be verified on oath. The summons also seeks leave to amend the Indorsement in the Writ of summons.

2. The summons was returnable on 6 February 2004, which was a Summons Day. Shortly before the hearing at just after midnight of 5 February 2004, the defendant's solicitors faxed to the plaintiff's solicitors a letter proposing to dispose of the summons on certain terms.

3. At the hearing before the Summons Judge and after discussions between the plaintiff's counsel and the defendant's solicitor, an order was made by consent, covering all the substantive relief sought in the summons. There was however disagreement over costs, including the plaintiff's request for a certificate for two counsel, the summons was therefore adjourned to a date to be fixed. Hence this adjourned hearing.

4. In the interim, at the defendant's request, leave was granted and the defendant had filed affirmations dealing with the plaintiff's summons, and the plaintiff had also filed affirmations in response thereto. According to Mr Kwok, the reason for these affirmations is that the defendant wishes to "put the record straight". For my part, I am unable to see the necessity or basis for these affirmations. The defendant has consented to an order, which is substantially in the same terms as the plaintiff's summons. But for the question of costs, the summons would have been disposed of at the February hearing. The affirmations filed do not deal with the question of costs. The defendant will have an opportunity to flash out its case when it comes to pleadings and preparing witness statements. The costs for these affirmations, including whether they amount to wasted costs, should be looked into when the case comes to taxation.

5. On the question of costs, both the plaintiff and defendant ask for costs of the summons. For the plaintiff, it is argued that the defendant has no right to the recordings. Therefore, irrespective of the outcome of this present action, the defendant should have delivered up the recordings and it has behaved unreasonably in refusing to do so, despite repeated demands from the plaintiff. Since the summons was necessitated by the defendant's unreasonable conduct, the plaintiff seeks costs against the defendant. Alternatively, the plaintiff asks for the plaintiff's costs in the cause.

6. For the defendant, it is said that the plaintiff's application is not justified because even if the defendant were in breach of the licence agreement, it does not mean the master recordings had to be returned. Alternatively it is said that the defendant had given an offer or reply by the letter dated 5 February 2004.

7. In the normal course, where a plaintiff has succeeded in obtaining an interlocutory injunction, he will be granted his costs in the cause : Hong Kong Civil Procedure 2004, Vol.1, para.29/1/44. I pause to point out that the normal costs order is different from a "costs in the cause" order. "Costs in the cause" means whichever party wins the action will get the costs. "Plaintiff's costs in the cause" means that even if the defendant succeeds in the action, he will not get the costs of the application, although he will not have to pay the plaintiff the costs of the application if the plaintiff fails in the action.

8. In the present case, the question that has to be asked is whether there are justifications for departing from the normal practice.

9. In the case of the plaintiff, it is true that the defendant had resisted the plaintiff's request for the return of the recordings until hours before the hearing of the summons. The plaintiff's request was first made in December 2003. Although it would have been better had the defendant complied with the request and delivered up the recordings before the summons was issued, it is a different thing to say that the defendant has behaved so badly that costs should be awarded against it in any event.

10. It is also to be noted that the defendant had not contested the delivery up order sought in the summons. Although the proposed terms were only communicated hours before the hearing, the defendant had effectively given everything asked for by the plaintiff and the summons was not fought.

11. I am not persuaded that the merits of the case and the defendant's conduct are such as to warrant a departure from the normal costs order and to award costs in favour of the plaintiff.

12. As for the defendant, in my view, it simply has no basis whatsoever for seeking costs against the plaintiff. In suggesting that the plaintiff's application for delivery up order is not justified, the defendant has ignored the plain fact that it had, for whatever reasons, yielded to the summons and had given everything that the plaintiff as asked for in the summons. It is a belated attempt to challenge the merits of the plaintiff's application.

13. I should also point out that the consent order is not a joint application to the court that is separate from the plaintiff's summons, as Mr Kwok suggests. It was of course made upon the parties' joint application, but the joint application is to dispose of the summons in the manner agreed by the parties. Indeed the parties' agreed terms have the effect of disposing of the principal relief sought in the summons. As noted above, but for the outstanding issue of costs, the summons would have been disposed of. The plaintiff's solicitors dated 6 April 2004 enquiring whether the defendant wishes to contest the plaintiff's application must be viewed in the contest and against the background that the defendant had, at the 6 February 2004 hearing, specifically sought leave to file affirmations on the plaintiff's application.

14. As to the argument that the defendant had made an offer, that offer was only made after the summons was issued and very close to the hearing. At any rate, it could not have a ground for seeking costs against the plaintiff.

15. In short, I do not consider there are justifications for not following the normal costs order for an interlocutory injunction application.

16. Thus far, I have only dealt with the costs of the plaintiff's summons and the hearing on 6 February 2004. In my view, the costs of today's hearing merit different consideration they are unnecessarily incurred. As the hearing notes of the last hearing shows, the Summons Judge had enquired with leading counsel whether the consent order would have disposed of the summons, to which leading counsel for the plaintiff answered in the affirmative. Impliedly, the plaintiff would have been contented for an order reserving the costs, as was set out in the handwritten draft order handed up to the Judge for approval and endorsement. What transpired subsequently was the argument about a certificate for two counsel, a matter that I will come to deal with shortly. This hearing would not have been necessary had the defendant not asked for the costs issue to be adjourned for argument. The costs of this hearing should follow event. The defendant has not succeeded in getting costs on the plaintiff's summons. And for reasons that I will come on next, the defendant's resistance to the certificate for two counsel fails. Accordingly, the defendant should bear the costs of this hearing.

17. On the question of certificate for two counsel, it is opposed on the ground that the defendant had not fought the summons. However, the plaintiff would not have known of the defendant's position until hours before the hearing. By then, brief to counsel had already been delivered and the costs would have been incurred. Further, the plaintiff could not have anticipated that the defendant would not resist the application given the defendant's stance as indicated in the correspondence exchanged between the solicitors.

18. Looking at the application itself, had it been necessary to argue it, then in view of the value of the subject matter and in view of the order that is sought (i.e. a mandatory delivery-up order), it cannot be said that it is unjustifiable for two counsel to appear. I am prepared to grant a certificate for two counsel for the hearing on 6 February 2004.

19. Finally, it has been brought to my attention that the defendant had made an offer by letter to dispense with today's hearing by an order that the costs of the plaintiff's summons be in the cause. The offer was rejected by the plaintiff. This offer falls short of the normal costs order and the costs order that I make. It also does not deal with the question of certificate for two counsel, which I have granted. That being the position, that letter does not assist the defendant in resisting any costs order to be made, either on the plaintiff's summons or in respect of the costs of today.

20. In short, I make the following orders :

(1) The costs of the plaintiff's summons, save the costs of today's hearing, be the plaintiff's costs in the cause.

(2) The costs of today's hearing this afternoon be to the plaintiff against the defendant in any event, to be taxed if not agreed.

(3) There is a certificate for two counsel for the hearing on 6 February 2004.